Heard at RE+: Clean energy’s cautious embrace of project finance tech

Two years on, the Inflation Reduction Act (IRA) continues to create meaningful gains in the renewable energy sector, with nearly 3.5 million Americans now working in the industry and more than $372 billion in clean energy investments since its passage. But as the industry moves into a new phase of growth, developers and financiers are trying to divine what the industry’s next act will look like — and how to keep up with the documentation required to scale clean energy deployment.

That was Banyan Infrastructure’s key takeaway from the RE+ conference in Anaheim in September 2024. With tens of thousands of attendees and a sprawling display of renewable energy tech, including a heavy focus on energy storage, the largest clean energy conference in North America showcased how far renewables have come in recent years. But with this meteoric rise comes tough challenges as developers and financiers seek to mobilize more capital, faster, to keep up with the market’s ever-increasing opportunities.

An ever-growing mountain of paperwork

More renewable energy projects — whether solar, storage, wind, or hydrogen — means more financing arrangements, which means more paperwork for every stakeholder involved. Across the board, the Banyan Infrastructure team members heard both developers and financiers emphasize the need to stay on top of this ever-growing mountain of documentation. Broadly speaking, reporting remains a challenge for clean energy projects regardless of financing structure, and this work requires a good deal of scrambling on the part of in-house staff to keep up with internal and external requirements.

To address these challenges, many companies and lenders have begun leveraging technology. This is a welcome step. Still, not all digital tools are created equal, and developers across the board are struggling to find the right combination of software solutions to enable their business goals. As one financier put it: “Every developer’s tech is a mess.”

The most advanced lenders and developers have embraced technology wholesale and are striving to find the appropriate tech stack to optimize deal flows, organize data, and produce timely, accurate reporting. Among this group, in-house financing teams have attempted to customize large, powerful software tools like Salesforce and Netsuite to achieve more streamlined systems. While this is a better approach than avoiding technology altogether, we heard financiers talk about coming up against the limitations of software tools not built specifically to meet their needs. Even with generic work management products tailored to suit in-house origination teams, challenges remain — the level of customization required to leverage these products is still expensive, time-consuming, and difficult to execute in a scalable manner.

Perhaps for this reason, more software solutions are cropping up to address the unique challenges of the renewable energy market. Industry-specific digital tools were well represented in the RE+ expo halls, not only for project finance but also to address interconnection issues, grid management, and more. Banyan Infrastructure had the opportunity to meet with some of these other software providers and understand how they are working to address different challenges in the market, as well as how various software solutions — including Banyan Infrastructure — can work together to streamline and create standards for project finance as well as a number of other areas of the renewable energy sector.

Scaling up sustainable green lending

But the big question we heard, mainly from financiers, was about the $27-billion elephant in the room: the Greenhouse Gas Reduction Fund (GGRF). The program, whose funds were dispersed by the end of September, is a monumental opportunity to deploy more clean energy, particularly to underserved communities, and ensure that sustainable infrastructure is a part of every corner of America. 

How best to leverage this new program remains a live conversation, and financiers were keen to learn whatever they could about the fund and its rollout. Banyan Infrastructure team members were on hand to share takeaways we’ve already learned from working with our GGRF partners as well as green lenders gearing up to maximize the impact of the fund. We also discussed the operational best practices we’ve developed based on those relationships as well as the digital tools we’re building to further streamline GGRF reporting.

With a wave of new reporting requirements still being ironed out, financiers expressed some anticipation for the funding but also concern about the volume and complexity of its reporting requirements. The sheer scale of this data collection and the work it will take to accurately gather, organize, store, and report to the appropriate entities meant at least one financier was “not excited” about the program’s rollout.

Banyan Infrastructure sees a solution to these long-standing challenges today and an opportunity to evolve with the ever-changing marketplace over the coming months. Streamlined data collection, management, and reporting tools empower developers and financiers to take control of their data throughout the project life cycle, saving time and money for renewable energy companies as they scale to meet the demand brought on by these public programs. As the Environmental Protection Agency (EPA) — GGRF’s administrator — develops its final reporting requirements, Banyan Infrastructure is also developing a one-click reporting tool that will allow financiers to quickly and accurately gather data on all projects and portfolios to send to the EPA and other relevant stakeholders.

Need help preparing for the GGRF or just starting out in green lending? Learn how to build operational best practices into your green lending program today.